Defendant owns property in Medford on which a "Wendy's" fast-food
restaurant is situated. The state determined that it needed to acquire a portion of
defendant's property adjacent to a road in connection with an improvement project. The
state and defendant were unable to agree on the compensation that the state should pay
for the taking and, on January 24, 2000, the state filed a complaint for condemnation,
alleging that it had attempted to reach an agreement with defendant as to the
compensation for the property, but was unable to do so, and that the true value of the
acquisition was $70,800.

On September 29, 2000, three days after receiving Palmer's report,
defendant filed his initial answer in the condemnation proceeding. That answer alleged
that the true value of the subject property was $355,082--the amount of the second of two
estimates in Palmer's first "complete summary appraisal report." Defendant did not,
however--either at that time or thereafter--disclose that report to the state.

Palmer subsequently generated other "complete summary appraisal reports"
for defendant. In particular, on April 24, 2001, Palmer provided defendant with a second
"complete summary appraisal report." Defendant disclosed that appraisal to the state
pursuant to ORS 35.346. In July 2001, Palmer produced a third "complete summary
appraisal report" but that document, like Palmer's first report, was not disclosed to the
state. Finally, in November 2001, Palmer produced a fourth "complete summary
appraisal report" for plaintiff, which plaintiff provided to the state pursuant to ORS
35.346.

On January 2, 2002, defendant filed an amended answer. The amended
answer alleged that defendant was entitled to $611,511 in compensation. With his motion
to file the amended answer, defendant's attorney filed an affidavit stating that the need to
amend the answer was due to discovery of documents produced by the state that indicated
that the highway project that caused the state's need for defendant's property would have
significant impacts on defendant's restaurant business. Those alleged impacts included
the possibility that the highway project, when completed, would result in traffic cutting
through defendant's parking lot, as well as the possible displacement of the restaurant
business entirely.

At trial, Palmer testified as a defense expert. Palmer described in detail the
methodology underlying his valuation. He testified that the value of the property before
the taking was $850,000 and that there were 62 parking spaces. He further testified that,
after the taking, the number of parking spaces would be reduced to 35, which would be
insufficient for a fast-food restaurant such as the Wendy's located on defendant's property.
Using an income approach to value, Palmer concluded that the value of the property after
the taking would be $370,000, and, thus, that the value of the property being acquired by
the state was $480,000.

In reviewing those submissions, the state's attorney discovered that Palmer
had billed defendant's law firm for four "complete summary appraisal reports"--rather
than only the two that had been provided to the state. Thus, the state first learned of the
existence of the other two reports. Based on that revelation, the state moved, pursuant to
ORCP 71 B and C, to set aside the judgment based on the newly discovered evidence.

In particular, the state argued that both of the previously undisclosed
reports were "appraisals" that were subject to compulsory pretrial disclosure under ORS
35.246(5)(b), which provides:

"In the event the owner and condemner are unable to reach
agreement and proceed to trial or arbitration * * * each party to the
proceeding shall provide to every other party a copy of every appraisal
obtained by the party as part of the condemnation action."

The trial court agreed that the state could not have, with due diligence,
discovered Palmer's undisclosed report before trial and that cross-examination on
Palmer's first report would probably have affected the trial's outcome:

"Defendant also asserts that the evidence does not meet the standard
of Oberg v. Honda Motor Company, 316 Or 263, 851 P2d 1084 (1993)
[rev'd on other grounds sub nom Honda Motor Co. v. Oberg, 512 US 415,
114 S Ct 2331, 129 L Ed 2d 336 (1994)]. I find the newly discovered
evidence does meet that standard. Had the information been available to
assert that Mr. Palmer had found in a prior appraisal the amount of just
compensation was $80,591.00 the jury might well have reached a different
result."

Nevertheless, the court declined to set aside the judgment because it
concluded that neither of the undisclosed reports (and the first in particular) was subject
to mandatory disclosure under ORS 35.346(5)(b). In so holding, the court emphasized
that the first "complete summary appraisal report" was labeled a "draft," and it expressed
its concerns that a broad construction of ORS 35.346(5)(b) would abrogate the "work
product doctrine" as set forth in ORCP 36 B, and Oregon case law:

"Appraisers are experts retained by parties in condemnation cases to assist
them in trial preparation. The mental impressions, conclusions, opinions or
legal theories of this attorney expert are still protected, except that the
appraisals are subject to disclosure, even if a party has decided not to use
that appraisal. ORS 35.346(5)(b).

"Mr. Palmer testified that the document in question was a draft and
that it showed on its face that additional information was needed before a
final determination of fair market value could be made. [The attorney for
defendant] stated in argument that he considered the document to be a draft
and an aid to him in preparing the case, including letting him know what
information the appraiser needed in order to reach his final conclusions.
Although [defendant's attorney] did not testify under oath, his statement was
a certification, pursuant to ORCP 17 C. On this testimony and certification
I find that Mr. Palmer and [defendant's counsel] were credible in their
presentations and their characterization that the document was genuinely
their interpretation of the document's status. While I am not bound by their
interpretation, I find within the context of condemnation litigation
[defendant's counsel] was entitled to have consultations with his hired
expert to develop his position in the case and this document was produced
for such a purpose.

"Under the [Uniform Standards of Professional Appraisal Practice],
any expressions of value, whether written or oral, and whether provided in a
letter or draft of an appraisal, would meet the definition of an appraisal.
Clearly, that approach is broader than the 1997 amendments [to ORS
35.346].

"This interpretation of the statute may well lead to further efforts to
avoid disclosure by labeling documents as drafts or preliminary statements.
Perhaps it is better to completely open the process and provide open
disclosure prior to trial. That determination does not belong to the Court,
but to the Legislature."

Before addressing the central issue of statutory construction, it is useful to
describe the character of the critical document. The first "complete summary appraisal
report," which stated that it was prepared for defendant's counsel, consisted of 54 pages,
addressing, inter alia, "preliminary appraisal information," "assumptions and limiting
conditions," "highest and best use," and "valuation methods." Accompanying and
attached to that report was an unsigned cover letter from Palmer to defendant's counsel,
which stated, in part:

"As requested, the captioned property has been valued using
generally accepted appraisal principles and practices. The report is intended
to comply with the report requirements of the Uniform Standards of
Professional Appraisal Practice (USPAP), the Appraisal Institute and the
client's appraisal requirements.

"The purpose of the appraisal is to estimate the market value of the
taking and damages resulting from the condemnation of the subject by the
Oregon Department of Transportation. The estimated value is based on the
following assumptions:

"(1)The use of the drive-through may be adversely affected by the
taking. It has been estimated that 55 percent of gross sales for a fast
food franchise restaurant comes from the drive-through. Therefore,
it is concluded that the income producing ability of the real estate
will be negatively impacted if the utility of the drive through is
diminished. Because it is unclear at this point whether or not the
drive through will be affected, this analysis will present two
valuations; one in which the use of the drive through is not damaged,
and one in which it is damaged.

"(2)It is unknown as to whether or not potential impact to the drive
through can be mitigated. If the cost to cure such potential damages
is less than that estimated in this report, a revision to the value
estimate will be required."

The word "draft" was handwritten on the report's cover, and the "certificate
of appraisal," which immediately followed the report's final "summary of values," was
unsigned. During the hearing on the state's ORCP 71 motion, Palmer testified that the
first "complete summary appraisal report" was his "initial and preliminary analysis." He
further indicated that he spoke with defendant's attorney about gathering additional
information to be used in further appraisals. Palmer stated that the document had been
denominated a "complete summary appraisal report" for billing purposes and that, for the
same reasons, subsequent similar documents had also been so titled.

We return to the text of the statute. See PGE v. Bureau of Labor and
Industries, 317 Or 606, 611-12, 859 P2d 1143 (1993). ORS 35.346, provides, in part:

"(1) At least 20 days prior to the filing of any action for
condemnation of property or any interest therein, the condemner shall make
a written offer to the owner or party having an interest to purchase the
property or interest, and to pay just compensation therefor and for any
compensable damages to remaining property.

"(2) The offer shall be accompanied by any written appraisal upon
which the condemner relied in establishing the amount of compensation
offered. If the condemner determines that the amount of just compensation
due is less than $20,000, the condemner, in lieu of a written appraisal, may
provide to the owner or other person having an interest in the property a
written explanation of the bases and method by which the condemner
arrived at the specific valuation of the property. The amount of just
compensation offered shall not be reduced by amendment or otherwise
before or during trial except on order of the court entered not less than 60
days prior to trial. An order for reduction of just compensation offered,
pleaded by the condemner in the complaint or deposited with the court for
the use and benefit of the owner pending outcome of the condemnation
action, may be entered only upon motion of the condemner and a finding by
clear and convincing evidence that the appraisal upon which the original
offer is based was the result of a mistake of material fact that was not
known and could not reasonably have been known at the time of the
original appraisal or was based on a mistake of law.

"* * * * *

"(4) The owner shall have not less than 40 days from the date of
receipt of the initial written offer and the accompanying appraisal from the
condemner to accept or reject the offer. If the owner rejects the
condemner's offer and obtains a separate appraisal, the owner shall provide
the condemner with a copy of the owner's appraisal not less than 60 days
prior to trial or arbitration.

"(5) (a) Failure to provide the opposing party with a copy of the
appropriate appraisal as provided in subsections (2) and (4) of this section
shall prohibit the use of the appraisal in arbitration or at trial.

"(b) In the event the owner and condemner are unable to reach
agreement and proceed to trial or arbitration as provided in subsection (6) of
this section, each party to the proceeding shall provide to every other party
a copy of every appraisal obtained by the party as part of the condemnation
action."

(Emphasis added.)

The term "appraisal" is not defined in ORS chapter 35--nor, indeed, in any
Oregon statute. However, when used in this context, that term does have a plain,
commonly understood meaning: "a valuation of property by the estimate of an authorized
person [.]" Webster's Third New Int'l Dictionary 105 (unabridged ed 1993). Moreover,
given the statute's multiple references to "a copy," see ORS 35.346(4), (5)(a), and (5)(b),
the legislature necessarily intended that the statute apply only to written, and not oral,
estimates of value by an authorized person. Accord ORS 35.346(2) (requiring condemner
to provide landowner with any "written appraisal" upon which condemner relied as a
basis for its initial offer of compensation).

The relevant portions of ORS 35.346 were enacted in 1997. Or Laws 1997,
ch 797, § 1. Before those amendments, ORS 35.346 required that, at least 20 days before
a condemnation action was filed, the condemner make a written offer, and that, if a
verdict at trial exceeded the highest written offer submitted by the condemner at least 30
days prior to trial, the landowner could recover costs and attorney fees. Senate Bill (SB)
1036 (1997) was enacted in response to a litigation tactic being used by condemners to
pressure landowners into accepting offers and not going to trial. That tactic, as described
to the legislature, was that the condemner would make an offer and, if that offer was not
accepted, would get an appraiser to testify at trial to a value lower than the offer, thus
increasing the likelihood that the landowner would not receive compensation equal to the
original offer. See generally Tape Recording, Senate Committee on Business, Law and
Government, SB 1036, Apr 8, 1997, Tape 143, Side B (statement of Senator Neil Bryant);
Testimony, Senate Committee on Business, Law and Government, SB 1036, May 13,
1997, Ex E (statement of Dick Bemis). In response to that tactic, and to facilitate
settlement, the legislature enacted provisions requiring mutual disclosure of appraisals.
See Tape Recording, House Committee on Transportation, SB 1036, June 16, 1997, Tape
129, Side B (statement of Senator Neil Bryant) ("So, there's a sharing of information and I
think that usually that will help facilitate a settlement.").

We thus conclude that "any appraisal" in ORS 35.346(5)(b) means any
written opinion by a qualified person regarding valuation of the condemned property that
a party obtains "as part of the condemnation action." That is so regardless of whether the
party actually relies on the appraisal. Compare ORS 35.346(2) (limiting production
requirement under that subsection to appraisals on which the condemner relies as a basis
for its initial offer). Indeed, "every appraisal" encompasses unfavorable appraisals that a
party has obtained. That construction of "every appraisal" comports both with the plain
meaning of the term and with the overarching legislative intent that the condemnation
process be conducted without subterfuge, with full reciprocal pretrial disclosure of expert
reports regarding valuation.

Palmer's first "complete summary appraisal report," as well as his third, fell
within the scope of that definition. Consequently, those reports were subject to
mandatory production under ORS 35.346(5)(b).

Defendant contends, nevertheless, that Palmer's reports should not be
deemed "appraisals" for statutory purposes because those reports did not represent
Palmer's final opinion as to valuation. Defendant emphasizes, particularly, that (1)
Palmer's report was "contingent" in the sense that it posited alternative valuations
depending on differing assumptions; (2) that report was marked "draft"; and (3) Palmer
did not sign the certification page--or, for that matter, any portion of the report.
Defendant further contends, echoing the trial court's concerns, that mandatory mutual
disclosure of all written opinions of valuation, including contingent, tentative, or "draft"
opinions, would impermissibly abrogate work product protections.

We reject defendant's arguments, both generally and particularly. We note,
at the outset, that nothing in the statutory scheme refers to "final" appraisals. Rather, for
example, ORS 35.346(2) requires production of "any written appraisal upon which the
condemner relied in establishing the amount of compensation offered." Nothing in that
language suggests that, if the condemner relied on a "draft" or unsigned report, it could
somehow evade mandatory production. The same is true of the owner's reciprocal
production obligation under subsection (4).

We also reject defendant's contention that Palmer's report was not an
"appraisal" because it posited alternative valuations--one based on the assumption that the
restaurant's drive-through would not be affected by the taking, and the second that it
would be. Defendant's argument proceeds from a false premise, viz., that the appraisal
was impermissibly contingent because "it contains two alternative values that are
dependent upon an unknown relevant fact." To the contrary, appraisals are commonly
predicated upon assumptions and hypothetical conditions. Indeed, the 2000 USPAP
standards for "summary appraisal reports," which are included in the record, explicitly
provide that a summary appraisal report shall "state all assumptions, hypothetical
conditions and limiting conditions that affected the analyses, opinions and conclusions[.]"

Defendant next contends that, even if--as we have concluded--Palmer's
undisclosed reports were "appraisals" that were subject to mandatory disclosure under
ORS 35.346(5)(b), the state still would not be entitled to relief under ORCP 71 B because
those appraisals do not qualify as "newly discovered evidence" under the six-part test set
forth in Oberg, 316 Or at 272. Under that standard:

"(1) [the evidence] must be such as will probably change the result
if a new trial is granted; (2) it must have been discovered since the trial; (3)
it must be such as, with due diligence, could not have been discovered
before the trial; (4) it must be material to the issue; (5) it must not be merely
cumulative; (6) it must not be merely impeaching or contradicting of former
evidence."

Id. (internal quotation marks omitted).

Defendant first asserts that, even if the appraisals had been disclosed, the
state would not have been able to present them at trial because, before trial, the parties
had agreed not to refer to the April 2001 "complete summary appraisal report" that
defendant had disclosed--and, thus, it could reasonably be assumed that all appraisals
would have been subject to the same agreement. We disagree. The parties' agreement
pertained to a specific, disclosed appraisal. It did not, and could not, pertain to appraisals
of which the state was unaware.

Defendant next argues that the appraisals did not qualify as "newly
discovered evidence" because they were "merely impeaching." See Oberg, 316 Or at 277.
As support for that argument, defendant points to the state's attorney's statement in his
affidavit in support of the ORCP 71 motion that, had the appraisals been disclosed, he
would have used them in cross-examination of Palmer. We disagree that the evidence
was "merely impeaching." Although the evidence might well have been used to impeach
Palmer on cross-examination, it also had other substantive significance. That is, the
newly discovered evidence not only contradicted Palmer's testimony about what he
believed the property was worth, but constituted substantive evidence about what the
property was worth.

We reject defendant's other arguments on appeal without discussion.

We conclude that, because the appraisal was discoverable under ORS
35.346(5)(b) and constituted newly discovered evidence for purposes of ORCP 71
B(1)(b), the trial court should have granted the state's motion to set aside the judgment.
Given our conclusion that the state was entitled to have the judgment set aside pursuant to
ORCP 71, the trial court's award of attorney fees to defendant pursuant to ORS 35.346(7)
must also be vacated.

Defendant also has filed a cross-appeal containing the following assignment
of error:

"In the event this court rules that the circuit court erred in denying
ODOT's Motion for Relief from Judgment and Motion to Set Aside the
Judgment under ODOT's Assignment of Error and this matter is sent back
for a new trial, Defendant contends that the circuit court erred in its order
granting ODOT's Motion to Strike in part and excluding evidence related to
Defendant's redevelopment theory."

Further, even if we were to assume that a new trial would necessarily occur
in this case, defendant's cross-appeal does not raise the type of issue that we would
address on the basis that it is likely to arise again on remand. In general, we consider
issues to be likely to arise on remand when the trial court or agency has determined a
question of law that will still be at issue after the case is remanded. See, e.g., Westwood
Construction Co. v. Hallmark Inns, 182 Or App 624, 50 P3d 238, rev den 335 Or 42
(2002) (addressing ruling concerning the availability of certain type of attorney fees under
ORS 87.060 as likely to arise on remand); State v. McFeron, 166 Or App 110, 999 P2d
470 (2000) (addressing propriety of jury instruction concerning ways in which state may
prove intoxication because it was likely to arise on remand); OR-OSHA v. Roseburg
Lumber Co., 151 Or App 236, 949 P2d 307 (1997) (addressing agency's construction of
legal standard set forth in administrative rule because it was likely to arise on remand).

Here, the issue presented by defendant on cross-appeal is not that type of
issue. The trial court's ruling that defendant challenges was not based on a conclusion,
for example, that a certain type of damages was not available in a condemnation action.
Rather, the trial court's ruling concerned, in essence, the sufficiency of defendant's
evidence of a certain type of damages. Specifically, the trial court's ruling that defendant
seeks to challenge on cross-appeal was based on its conclusion that "[t]he absence of any
quantification of diminished use of the property due to cut-through traffic and the lack of
comparables needed to support the appraiser's opinion of value based on 'cut through
traffic' renders such testimony speculative." Even assuming that our disposition of this
appeal ultimately leads to a new trial in the present case, issues concerning the sufficiency
of defendant's proof of damages will be based on a new record. Thus, no purpose would
be served by offering our opinion about the sufficiency of defendant's evidence in a case
in which the judgment was set aside.

On appeal, reversed and remanded with instructions to grant plaintiff's motion for relief from judgment under ORCP 71 B(1)(b) and to vacate award of attorney
fees pursuant to ORS 35.346(7); cross-appeal dismissed.

1. All references to ORS 35.346 are to the 2001 version of that statute.

3. The trial court's allowance of the state's "motion to strike" with respect to the
alleged insufficiency of defendant's proof of the impact of "cut-through traffic" is the subject of
defendant's conditional cross-appeal. See ___ Or App at ___ (slip op at 16-19).

"If a trial is held or arbitration conducted for the fixing of
the amount of compensation to be awarded to the defendant owner
or party having an interest in the property being condemned, the
court or arbitrator shall award said defendant costs and
disbursements including reasonable attorney fees and reasonable
expenses as defined in ORS 35.335(2) in the following cases, and
no other:

"(a) If the amount of just compensation assessed by the
verdict in the trial exceeds the highest written offer in settlement
submitted by condemner to those defendants appearing in the
action at least 30 days prior to commencement of said trial[.]"

"[T]he jury was kept in the dark about the fact that the owner's
expert appraiser concluded early on that the State's appraiser could
be right. If the jury had heard that evidence, it probably would
have concluded that the weight of the evidence supported a finding
that the takings and damages did not exceed the State's offer of
$117,500 -- the 30-day offer or benchmark of condemnation cases.

"That is a different conclusion than what was reached and it
likely resulted from Mr. Palmer's testimony that the takings and
damages were $480,000. The jury was likely influenced purely by
the great disparity between the State's appraiser's estimate of just
compensation and Mr. Palmer's. The jury's award would probably
have been closer to the State's estimate had it known that Mr.
Palmer expressed his opinion in September 2000 that just
compensation could be a little over $80,000 -- $400,000 less than
his trial testimony, and about $10,000 more than the State's
estimate."

6. While the state's legal arguments are applicable to the nondisclosure of both the
first and third "complete summary appraisal reports," the focus of the parties' arguments is on the
first report. Thus, our focus, too, is on that report.

7. Both the state and defendant point to various regulations promulgated under ORS
674.310(2), pertaining to the licensing and oversight of real estate appraisers. Specifically, both
note that (1) OAR 161-002-0000(3) (2000) defines "appraisal" as meaning "'appraisal' as defined
in [the Uniform Standards of Professional Appraisal Practice (USPAP)]" and; (2) the USPAP, in
turn, defines "appraisal" as "the act or process of developing an opinion of value; an opinion of
value * * * of or pertaining to appraising and related functions--e.g., appraisal practice, appraisal
services."

That reliance is unavailing. Even assuming, without deciding, that the
version of OAR 161-002-0000(3) that the parties invoke might otherwise be material, that
version, incorporating the USPAP's definition of "appraisal," was not promulgated until 1999,
two years after the enactment of ORS 35.346(5)(b). Consequently, it is inapposite. See Stull v.
Hoke, 326 Or 72, 79-80, 948 P2d 722 (1997) (subsequently enacted provision cannot serve as
context in construing a statute); Carey v. Lincoln Loan, 165 Or App 657, 667, 998 P2d 724
(2000) (applying principle).

"It is unfortunate that the attorneys for the parties have let
their arguments degenerate into casting aspersions on the other's
motives or candor. The issue presented is not one of deception or
bad motives, it is one of statutory interpretation of a new statute.
The positions of both parties are valid positions which have not
been addressed by an Oregon appellate decision."

We note, moreover, as did the trial court, that Palmer's and defense
counsel's understanding and characterization of the undisclosed reports as mere "drafts" is hardly
dispositive. See ___ Or App at ___ (slip op at 6-7) (quoting trial court's order denying ORCP 71
relief). Rather, the issue is one of statutory construction--and, more precisely, whether, given
their content, Palmer's first and third "complete summary appraisal reports" were "appraisals"
within the meaning of ORS 35.346(5)(b).

9. Defendant asserts that, before the trial court, the state took the position that "draft"
appraisals are not subject to mandatory production under ORS 35.346 and that that alleged
concession somehow constrains our review. Defendant misapprehends our function in
construing statutes. Regardless of any "concession" by a party, we are obligated to construe a
statute properly. See Stull, 326 Or at 77 ("In construing a statute, this court is responsible for
identifying the correct interpretation, whether or not asserted by the parties.").

10. ORCP 36 B permits discovery of relevant material that is "not privileged." OEC
503(2) provides a privilege for "confidential communications" between a client's lawyer and the
lawyer's representative such as an expert retained to facilitate the rendition of legal services. See
generallyState v. Riddle, 330 Or 471, 8 P3d 980 (2000) (describing extent and limitations on
privilege).